Notes

This is a transcript of the talk that Sheikh Haitham delivered in London regarding student loans:

1. If you can avoid the Tuition Loan by paying 1st hand or borrowing from family/a relative/a friend then you should. There is no doubt that this is Halaal.

2. It's important to understand what Riba is; it is paying back more money than you borrowed. With regards to Student Finance, any Tuition Loan you apply for is only handled by the SLC (Student Loans Company) and the University, not you. This is money that you never see or own, it is simply passed from one hand of the government to another.

Since you effectively never borrowed or owned this money in the 1st place, you will not be paying it back. Since you won't be paying back a loan, any amount you do pay cannot qualify as Riba.

So then what do you pay for after you leave Uni? You pay for studying the course. Any amount that you pay once you start working is considered as paying for the course that you studied, this should be treated as a product and paying any price for a product is Halaal. Hence, the Tuition Loan is Halaal (in Sh. Haitham Al-Haddad's opinion).

3. You will not be held accountable for this debt if you cannot pay it because it only demands payback when you earn enough, it is cleared 30 years after graduation and it's also cleared if you die beforehand.

4. You are free to apply for as many grants, bursaries and scholarships as you wish. This is free money, it's non-repayable so Riba is not an issue with regards to this type of finance.

5. Do NOT apply for a Maintenance Loan. Unlike the Tuition Loan which is not actually received by you, the Maintenance Loan is paid directly into your bank account, so this type of Finance IS directly borrowed and owned by you and it's this borrowed money that you will pay for once you start working. Therefore any money that you pay on top of the borrowed amount is classified as Riba and is unquestionably Haraam.

Fear Allah, those who consume Riba will be given a sword by Allah on The Day of Judgement and Allah the Almighty will wage war against them. Do not transgress the limits set by Allah, have trust in His plan because Ar-Rahman loves you more than you love yourself. And remember that one day you will be resurrected in front of your Lord to answer for your deeds. Do not become too attached to the Dunya and focus mainly on the Aakhira. Aim for the best in life, but aim even better for the hereafter.

"Whoever fears Allah, Allah will find a way out for him & He will provide for him from sources that he could never have imagined." (Qur'an 65:2-3)n